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Bank of Chongqing, a city-based commercial lender on the mainland, will begin a shortened roadshow today in Hong Kong as it seeks to raise up to US$593 million through an initial public offering.

The lender, based in the western municipality of Chongqing, is offering 707.5 million shares in an indicative price range of HK$5.60 to HK$6.50, representing a price to book ratio of 0.88 to 0.99 based on this year's forecast asset value, according to people with direct knowledge of the deal.

Before the exercising of an option to issue additional shares, about 37.5 million old shares held by the mainland's National Social Security Fund, or about 5 per cent of the entire deal, are to be included in the share sale. That is a part of the central government's move to decrease its influence over commercial decisions.

Shares will be marketed to investors in Singapore on Friday, according to a preliminary schedule. Weak demand means the bank may not conduct roadshows in London, New York and Boston. The shares will be priced next Wednesday and are scheduled to begin trading on November 8.

No investors have been willing to accept a six-month lock up period to become a "cornerstone" investor in the Bank of Chongqing deal, according to bankers familiar with the situation. That affirms concerns about deteriorating asset quality following the mainland's credit boom that started in 2008. Bank of Chongqing's revenue from small loans to private enterprise and its potential to develop private banking services for a number of clients in the region underpin the story, said bankers familiar with the situation.

The small loans business, which represents about 10 per cent of Chongqing's overall revenue, grew by 28 per cent last year, according to its latest annual report.

Bank of Chongqing, 20 per cent owned by Dah Sing Bank, has trimmed the original size of its offering. The share sale makes the bank the first mainland city commercial lender to raise capital in Hong Kong following the virtual closure of the mainland's domestic listing market in November last year.

On Monday, Huishang Bank, a lender in the eastern province of Anhui, started a weeklong pre-marketing campaign for its US$1.2 billion listing.

Huishang might start its roadshow on Tuesday at the earliest, as the lender was still meeting so-called cornerstone investors before the official launch, bankers said. Lack of interest from foreign institutional investors has made mainland bank IPOs a tough sell, with the bulk of demand coming from private mainland companies.